AGM Watch: MSWG intrigued by ‘unbelievably’ low internal audit fee

THE Minority Shareholders Watch Group (MSWG) is querying SMTrack Bhd as to how the company’s audit committee is able to assure itself of adequate and effective internal audit (IA) function given the paltry fee it paid for such service.

According to the company’s Annual Report 2020, SMTrack incurred RM4,000 (2019: RM4,000) or about RM333 per month for its IA function during the financial year ended (FYE) July 31, 2020.

“How many internal audit reports were issued during FYE2020? What areas did the internal audit reports cover?” asked the shareholder activism group.

Similarly, MSWG also seeks explanation from SC Estate Builder Bhd given the total fee for its outsourced IA function during the FYE2020 (covering a period of 18 months) was only RM12,000.

“Given that the fee is rather small (approximately RM667 per month), how does the audit committee assure itself that there would be adequate coverage and an effective audit function?” enquired MSWG.

“What are the areas covered by the IA function? How many internal audit reports were issued during the said period?”

Elsewhere, MSWG also questioned Xidelang Holdings Ltd with regard to the company’s dividend policy to distribute up to 20% of its net profit as dividend payment to shareholders.

Contradicting the dividend policy, however, no dividend was proposed during the company’s FYE2020 despite having posted RM34.5 mil in net profit for FYE2020.

“What is the outlook for future dividend declaration?” enquired MSWG.

Lastly, the shareholder activism group took CME Group Bhd to task for allowing the company’s chairman post to be vacant since FY2000.

“Why does it take two decades for the board to assess the need to appoint a chairman and to identify a suitable candidate to fill the position?” questioned the minority shareholder body.

CME Group’s board has said it will continue to assess the need to fill the position from time to time, according to the company’s recent Corporate Governance Report. – Dec 25, 2020

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